We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Manappuram Finance Limited's (NSE:MANAPPURAM) CEO For Now

Key Insights

• Manappuram Finance will host its Annual General Meeting on 14th of August
• Salary of ₹95.0m is part of CEO Vazhappully Nandakumar's total remuneration
• The total compensation is 604% higher than the average for the industry
• Manappuram Finance's total shareholder return over the past three years was 28% while its EPS grew by 8.2% over the past three years

Performance at Manappuram Finance Limited (NSE:MANAPPURAM) has been reasonably good and CEO Vazhappully Nandakumar has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 14th of August, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Manappuram Finance

Comparing Manappuram Finance Limited's CEO Compensation With The Industry

According to our data, Manappuram Finance Limited has a market capitalization of ₹170b, and paid its CEO total annual compensation worth ₹207m over the year to March 2024. Notably, that's an increase of 11% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹95m.

In comparison with other companies in the Indian Consumer Finance industry with market capitalizations ranging from ₹84b to ₹269b, the reported median CEO total compensation was ₹29m. This suggests that Vazhappully Nandakumar is paid more than the median for the industry. Furthermore, Vazhappully Nandakumar directly owns ₹59b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹95m	₹90m	46%
Other	₹112m	₹96m	54%
Total Compensation	₹207m	₹186m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Manappuram Finance sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Manappuram Finance Limited's Growth

Manappuram Finance Limited's earnings per share (EPS) grew 8.2% per year over the last three years. Its revenue is up 30% over the last year.

We like the look of the strong year-on-year improvement in revenue. With that in mind, the modestly improving EPS seems positive. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Manappuram Finance Limited Been A Good Investment?

With a total shareholder return of 28% over three years, Manappuram Finance Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for Manappuram Finance you should be aware of, and 1 of them is potentially serious.

Important note: Manappuram Finance is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com